Hardening the budget constraint
Institutional reform in the financial management of Hungarian local governments
Bibliographic Data
| ID | 21282017 |
|---|---|
| Authors | Tamás Vasvári (0000-0001-9328-2198, University of Pecs, corresponding author) |
| Year | 2020 |
| Volume | 70 |
| Issue | 4 |
| Pages | 571-592 |
| Publication date | 2020-12-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Acta Oeconomica (JOURNAL) |
| Journal identifiers | ISSN: 0001-6373 • E-ISSN: 1588-2659 |
| Publisher | Akademiai Kiado Zrt. (PUBLISHER • HU) |
| DOI | 10.1556/032.2020.00037 |
| OpenAlex | W3110715150 |
| Language | EN |
| Citations received | 4 |
| References cited | 4 |
Kornai (2014) described the problems of municipal indebtedness in Hungary and analysed the process of bailout carried out between 2011 and 2014. In the same period, the central government also reformed the local government system, which included serious limitations of their financial independence. This study re-examines the state of the soft budget constraint (SBC) of Hungarian local governments. To start, the general theoretical framework of SBC is introduced. Then, the budget constraint on the Hungarian local governments before the bailout is described briefly, followed by an assessment of the corresponding measures which were expected to offset the negative messages of the completed bailout and to harden the budget constraint. The study concludes that the central government decided to harden the budget constraint through the introduction of new hierarchical mechanisms, while the development of fiscal discipline stopped. On the one hand, this resulted in the consolidation of municipal budgets, but on the other, it was accompanied by a serious limitation of local autonomy, projects and borrowing in general, while the central government employs specific administrative tools to show favour to some settlements according to its (political) interests
Bailout · Budget constraint · Budget process · Business · Central government · Consolidation (business) · Constraint (computer-aided design) · Economics · Financial crisis · Local government · Macroeconomics · Microeconomics · Political science · Politics · Engineering · Finance · Fiscal Policies and Political Economy · Hungarian Social, Economic and Educational Studies · Law · Local Government Finance and Decentralization · Public Administration
| Citations per year | 1 |
|---|---|
| Citation span | 2022 - 2026 (5) |
| Highly cited | No |